New figures showing the encouraging levels of growth in the North East have been tempered by predictions of a slowdown in 2016.

GVA figures released by the Office for National Statistics showed the North East generated £47.7bn in 2014, an increase of 3.2% on the year before, equating to £18,216 per head.

The growth compared with 2.8% in Yorkshire and 2.3% in the North West.

Jonathan Walker, NECC head of policy and campaigns, acknowledged the region’s performance fell behind the UK average of 4.6%, but nonetheless deemed the figures “extremely positive”.

“We are the fastest growing northern region and this undoubtedly shows how integral we are to the development of a Northern Powerhouse, something that must be recognised by Government,” he said.

North East LEP chief economist, Chris Milne, also spoke of the region’s “encouraging” performance.

“If we can sustain this growth, it will help us move towards our aims for more and better jobs for the region,” he said.

“We’ve seen strong growth in some of our key sectors, including those which support growth for the economy as a whole, such as business services and those that demonstrate investment is taking place, including construction.

“The shrinkage we’ve seen in the public sector has been more than compensated for by the growth of the private sector, which is excellent news.”

A further report released yesterday, however, suggests that, along with Wales, the North East will be the joint slowest growing region in the UK throughout the next three years, its dependence on manufacturing and the public sector being major factors in the situation.

The EY UK Region and City Economic Forecast predicts the region’s economy will grow by 1.6% in GVA terms between 2015 and 2018, compared with a wider UK average of 2.3%.

Infrastructure connected to the Northern Powerhouse, meanwhile, would be unlikely to impact economic growth until the next decade.

Mark Hatton, North East Senior Partner at EY, said: “While it’s some consolation that the North East’s growth is expected to improve between 2015 and 2018, it’s clear that regional and national policy makers need to do much more to support growth in the North East to offset the impact of slowdowns in a number of key industries.

“There’s a gap in terms of growth between the North East and the rest of our Northern counterparts, as well as between the South and the rest of the country.

“It’s critical therefore that, at both a regional and national level, leaders focus on policy that can help to create a more balanced economy in geographic terms.

“This includes doing more to support key existing industries, such as manufacturing in the North East, as well as new, high value sectors that can attract investment and help to generate wealth and jobs.”

Nigel Mills

The comments were echoed by Nigel Mills, chairman of the Entrepreneurs’ Forum, who said of the latest GVA figures: “It’s good to see the North East growing, but more needs to be done to close the growth gap with the south.

“While we grew faster than the other northern regions in 2014, much of the UK, London in particular, is pulling ahead.

“Entrepreneurship is vital to any effort to close this gap and at the Entrepreneurs’ Forum we believe that increasing the number of businesses in the North East, through supporting growing companies and fostering a culture of entrepreneurship can address this challenge, and increase employment at the same time.”